The S&P 500 VIX Volatility index traded below 15 yesterday for the first time since early 2011. A number of financial players have commented that a drop below 15 for the VIX is a warning sign for the market. A look at the historical trading patterns of the VIX and the S&P 500, however, show that this is simply not the case.

Below is a chart of the S&P 500 since 1990. The green shading represents any time that the VIX was below 15. As shown, the VIX was basically below 15 from mid-1992 through early 1996 as well as mid-2004 through early 2007. During these time periods, the S&P 500 experienced huge gains.

A VIX at 15 really isn't that low based on historical standards either. Since 1990, the median daily close of the VIX has been 19, and during the two periods mentioned above, the median was 13.

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